Student Loan Interest Rates: Your Guide to Understanding the Numbers

With roughly 71% of students taking out at least one loan to attend college, it's more important than ever to understand what you're getting yourself into financially. One important component of that equation is understanding the interest rate on your student loans. Depending on whether you're borrowing from the federal government, a private lender, or both, the interest rates associate with each loan will vary. Read on or use our navigation links to find what you're looking for:

Interest Rates for Federal Loans: 2016-2017 School Year (disbursed after July 1, 2016)

The disbursement date for any student loans is the date on which you receive payment from the lender. Our table here shows the current interest rates on the available types of federal loans. Note that like most stated interest rates, these percentages represent the amount of interest you will pay on an annual basis.

Type of Loan Type of Borrower Interest Rate
Direct Subsidized Loans Undergraduate 3.76%
Direct Unsubsidized Loans Undergraduate 3.76%
Direct Unsubsidized Loans Graduate 5.31%
Direct PLUS Loans Parents and Graduate 6.31%
Perkins Loans Undergraduate and Graduate 5.00%

Interest Rates for Student Loans Between 2006-2016

If you received your student aid funds (disbursement) prior to 7/1/2016 you'll need to look at our tables below in order to see what the interest rates are on those loans. We've also provided a chart that illustrates the interest rate pattern for three types of student loans (direct subsidized, direct unsubsidized, and direct PLUS) since 2006.

*Note that in the above chart we didn't include the historical rates for Stafford Loans or Federal PLUS Loans. Both loans were part of the Federal Family Education Loan Program (FFEL) which was terminated in 2010. However, we have included their historical rates from 2006 and on in our breakdown below.

Direct Subsidized Loans

While direct subsidized loans are only available to those students with higher financial needs, they are preferrable to unsubsidized loans in two significant ways. First, subsidized loans don't accrue interest during the time that you're attending school. Secondly, the borrower is granted a 6 month grace period post-graduation before they are required to start making payments towards the student loan balance. However, the interest rates on direct subsidized loans are the same as their unsubsidized counterpart.

Loan Type Borrower Type Disbursement Date Interest Rate
Direct Subsidized Loans Undergraduate July 1, 2015 - June 30, 2016 4.29%
July 1, 2014 - June 30, 2015 4.66%
July 1, 2013 - June 30, 2014 3.86%
July 1, 2011 - June 30, 2013 3.40%
July 1, 2010 - June 30, 2011 4.50%
July 1, 2009 - June 30, 2010 5.60%
July 1, 2008 - June 30, 2009 6.00%
July 1, 2006 - June 30, 2008 6.80%
Direct Subsidized Loans Graduate July 1, 2006 - June 30, 2012 6.80%

Direct Unsubsidized Loans

These student loans are more easy to qualify for than the subsidized version because you don't need to prove financial need. That being said, while the interest rates are identical between the two, the terms for direct unsubsidized student loans aren't quite as good. You'll be responsible for paying the interest accumulated on the loan even during the period you are in school. If you don't make these interest payments while in school, the aggregate amount of the interest payments will be tacked onto your total loan amount.

Loan Type Borrower Type Disbursement Date Interest Rate
Direct Unsubsidized Undergraduate July 1, 2015 - June 30, 2016 4.29%
July 1, 2014 - June 30, 2015 4.66%
July 1, 2013 - June 30, 2014 3.86%
July 1, 2006 - June 30, 2013 6.80%
Direct Unsubsidized Graduate July 1, 2015 - June 30, 2016 5.84%
July 1, 2014 - June 30, 2015 6.21%
July 1, 2013 - June 30, 2014 5.41%
July 1, 2006 - June 30, 2013 6.80%

Direct PLUS Loans

Direct PLUS student loans differ from the above in that they're more targeted towards graduate and professional students, in addition to parents who are helping their dependent children finance their education. While Direct Subsidized and Unsubsidized loans won't take your credit history into account, if you're looking to borrow a Direct PLUS loan, a poor credit history could mean that you aren't eligible. Additionally, rates for Direct PLUS student loans are higher than what you'll see for other federal student loans.

Loan Type Borrower Type Disbursement Date Interest Rate
Direct PLUS Loans Parents & Graduate July 1, 2015 - June 30, 2016 6.84%
July 1, 2014 - June 30, 2015 7.21%
July 1, 2013 - June 30, 2014 6.41%
July 1, 2006 - June 30, 2013 7.90%
Federal PLUS Loans Parents & Graduate July 1, 2006 - June 30, 2010 8.50%

Private Student Loans Interest Rates

If you're looking for the best student loans to finance your college education, we always recommend that you start by looking at federal student loans first. Your college admissions guide should be able to get you started down the right path. One reason is that federal loans have fixed interest rates and also offer different repayment plans. These features aren't typically offered by private lenders. However, if you've already taken our federal student loans but are still falling short of affording your dream college, then it may make sense to look at private student loan lenders as a supplement to your federal loans.

With that in mind, interest rates on private student loans (unlike their federal counterpart) can vary widely from lender to lender and also fluctuate based on several other factors, such as your credit score. To give you an idea of what your interest rate may be on a private loan we looked at 7 different private lenders to see what they were charging. Unlike federal loans that have fixed interest rates that are adjusted each year, private loans interest rates are set by the lender and can vary based on a number of factors including your credit score and the amount borrowed. Our analysis will show you a range (both a minimum and a maximum) across fixed rate and variable rate products from each company.

Lender Fixed Interest Rate Range Variable Interest Rate Range
Citizens Bank 5.75 - 11.75% 3.03 - 10.28%
College Ave 5.99 - 12.1% 3.09 - 9.6%
SallieMae 5.75 - 11.9% 2.63 - 9.85%
Discover Student Loans 6.24 - 11.49% 3.62 - 9.12%
Wells Fargo 6.49 - 11.99% 3.74 - 9.74%
PNC 6.19 - 11.84% 4.23 - 10.48%
SunTrust 4.6 - 11.15% 3.87 - 9.92%

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